Is Pilgrim's Pride's U.S. Fresh Segment Driving Margin Stability?

Pilgrim's Pride Corporation’s (PPC) ability to maintain margins in the third quarter of 2025 despite a downturn in commodity chicken pricing underscores the crucial role of the U.S. Fresh segment, particularly the Case Ready and Small Bird businesses.

Management highlighted that U.S. Fresh sustained strong results, backed by quality, service and progress in operational excellence. Case Ready and Small Bird specifically benefited from strong retail and QSR demand from key customers, while Big Bird captured efficiencies from targeted operational improvements.

On the latest earnings call, the company detailed how Case Ready served as a stabilizer, outperforming category averages with higher-attribute offerings. Profitability in Case Ready improved both year over year and sequentially, reinforcing its position as a high-value, low-volatility contributor. Meanwhile, Small Bird’s alignment with chicken-focused QSRs, one of the most resilient parts of foodservice traffic, helped offset softness in the bone-in category. These customer-aligned channels provided demand consistency even as consumers shifted spending patterns amid inflationary pressure.

The Fresh portfolio also absorbed pressure from Big Bird commodity declines, thanks to ongoing operational upgrades. Improved yields, healthier bird performance and better live operations helped Big Bird margins remain comparable to last year despite sharp declines in boneless breast prices in September.

Fresh chicken demand rose in retail as consumers traded down from beef due to a record price spread, providing a favorable demand environment for Case Ready and other Fresh cuts. This balance within the business helped cushion the impact of commodity fluctuations.

Overall, margin stability was mainly driven by the fresh segment’s reliable performance, as it continued to benefit from demand strength and ongoing efficiency gains.

Pilgrim's Pride’s Zacks Rank & Share Price Performance

Shares of this Zacks Rank #3 (Hold) company have lost 21.1% over the past three months, outperforming the industry’s 27.5% decline but trailing the broader Consumer Staples sector’s 4.7% drop. Over the same period, PPC also underperformed the S&P 500 index, which gained 7.7%.

PPC Stock's Past 3 Months Performance

Is PPC a Value Play Stock?

Pilgrim’s Pride currently trades at a forward 12-month P/E ratio of 8.22, which is down from the industry average of 13.51 and notably below the sector average of 16.44. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.

PPC P/E Ratio (Forward 12 Months)

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This article originally published on Zacks Investment Research (zacks.com).

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